Auto Insurance

How Much Auto Insurance Do I Need?

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car_insuranceIs it possible to have too much auto insurance coverage? It is important to review your coverage to determine if you have the appropriate amount of coverage for all the cars in your household. You need to provide a minimum of protection for your auto against certain liabilities that could result from being in an accident (and damage to a third party other than a passenger in your car).

It is important to understand how much insurance you need and to meet the coverage limits required for the jurisdiction you perform the most driving in. It is possible to carry more auto insurance than what you need, but a meeting with an insurance agent can help you determine the appropriate amount of coverage for you and your household.

What Elements of My Auto Insurance are Needed?

Generally, your auto insurance protection covers the following:

  • Liability – coverage for bodily injury and property damage to others (not you) as a result of an automobile accident you are involving you and another driver.

  • Personal Injury Protection or PIP – PIP provides protection for injury you or a passenger may suffer as a result of an accident.

  • Comprehensive Collision Protection – provides coverage for repairs or replacement of your auto as a result of an accident.

At a minimum, most states require that you carry auto liability coverage. This mandate protects the interests of other drivers should you become involved in an accident. An auto insurance company will set limits within your liability protection on a per incident and overall coverage provided (ie 25/250 may refer to a per accident limit of $25,000 and an annual benefit limit of $250,000).

Looking for Duplications in Coverage

Once you have met your state’s minimum requirements for protection in your auto insurance coverage, you need to look at elements of your policy to determine if they have liability other insurance protection you have. For example, having personal injury protection provides you with peace of mind that comes with knowing that your medical bills will be taken care of if an accident you are involved in results in bodily injury. This protection could, however, duplicate the benefits you receive from your individual health insurance. In other words, you may be paying twice for the same coverage.

Comprehensive collision makes sense for new cars or those with a high dollar value. If you drive an older vehicle with little to no value, you may find that the benefit due as a result of an accident may be insufficient to replace or properly repair the auto. Taking the time to review your car insurance protection against other insurance you have which provides similar protections may help you save money in the long run.


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